SAN FRANCISCO — Mobile banking company Varo Money, Inc. has closed a $241 million Series D round, co-led by new investor Gallatin Point Capital and existing investor The Rise Fund, co-founded by TPG, U2 lead singer Bono and former eBay President Jeff Skoll. Other new investors joining the round include HarbourVest Partners and Progressive Insurance.
The investment will be used to fuel Varo’s growth and to help Varo innovate across a range of financial products. To date, Varo has raised a total of $419.4 million and says it plans to become the first and only fully digital bank to receive a national charter.
“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country,” said Colin Walsh, founder and CEO of Varo. “As the first fully digital national bank, Varo will bring our mission of financial inclusion to life and create more financially resilient – and thus healthier and stronger – communities. This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion.”
“In the midst of all the economic challenges people are facing right now, the digital economy can still be a force for good. Varo’s focus on financial inclusion and the support they offer people to help manage their finances and reduce financial stress really matters at a time when so many American families are struggling in a volatile economy. And that’s why RISE chose to partner with the team at Varo,” said Maya Chorengel, co-managing partner of The Rise Fund.
During the COVID-19 crisis, Varo has worked proactively to support customers by prioritizing the processing of electronic and paper check Treasury payments and providing individuals who have direct deposit early access to stimulus and unemployment relief funds*. The company increased both deposit and ATM limits and accelerated key partnerships that provided direct benefits to customers impacted by the pandemic, including with job platforms Steady and Wonolo.
Varo officially launched its banking services in July 2017, offering premium banking products through The Bancorp Bank, to help Americans stretch their money with bank and savings accounts that have no minimum balance requirement and no monthly account fees. Varo’s No-Fee Overdraft allows qualified customers to overdraw their bank account up to $50 with no fees. Varo also offers fee-free ATM withdrawals with its network of more than 55,000 Allpoint ATMs worldwide.
“We’re excited for the opportunity to invest in Varo and look forward to exploring a commercial relationship,” said Progressive’s Chief Strategy Officer, Andrew Quigg. “We understand consumers’ needs continue to evolve and Varo provides a convenient, cost-effective way for all consumers to bank. We like to partner with strong, experienced management teams and believe that our investment in Varo aligns well with this strategy.”
Varo is in the final stages of its national bank charter application and pending completion of the conditions of the OCC, the FDIC and the Federal Reserve, Varo will receive approval to be a national bank which is expected in summer 2020. Upon charter approval, Varo will expand its services to offer credit cards, loans, and additional savings products.